Here’s Why Snap Inc Skyrockets Over 20% This Evening

Can you feel the ground moving beneath your feet? Shares of Snap Inc (NYSE:SNAP) are skyrocketing over 20% in after-hours trading Tuesday, after the social media giant reported fourth-quarter results that beat Street expectations. Specifically, the company reported total revenues and pro forma EPS of $285.7 million and ($0.13) versus street expectations of about $253 million and ($0.16), respectively.

GBH Insights analyst Daniel Ives commented, “This eye popping top-line beat was a “shocker” and was a stark contrast to the overwhelming bear sentiment heading into the 4Q print and speaks to a company with strong growth prospects, albeit clear business challenges ahead to iron out in 2018. After much pain that investors have endured since SNAP went public, this quarter was finally a breath of fresh air that gives new life to the SNAP turnaround story in 2018. That said, SNAP added roughly 9 million users this quarter vs. our expectations for 6 million users bringing the company to 187 million DAUs, which represents roughly 20% year over year growth with a trajectory to exceed 200 million users during the course of 2018. Better than expected ARPU of $1.53 (vs. the Street at $1.36) will be a major focus of 4Q which we believe will grow 30%-35% YoY in 2018, although still a major Achilles heel which is well below industry norms and a front and center strategic focus going forward for Spiegel & Co as part of the app redesign. Overall, this quarter was a major step in the right direction for the company and will be a tough pill to swallow for all the naysayers that threw in the white towel over the last few months.”